Economic Implications of Tax Revenue and Non-Tax Revenue on Government Finances in Sokoto State, Nigeria

Abstract

This study investigates the economic implications of tax revenue and non-tax revenue on government finances in Sokoto State, Nigeria. The study examines the stability and volatility of tax revenue and non-tax revenue and assesses their relationship to overall revenue generation in the state. Using a quantitative research design anchored on descriptive statistics, the study analyzes data from the Nigeria Governors’ Forum Public Finance Database. The findings reveal that tax revenue and non-tax revenue have significant economic implications on government finances in Sokoto State, contributing 12.83% and 5.25% to the total revenue, respectively. The study also finds that there is stability and volatility with tax revenue and non-tax revenue, with moderate variability in tax revenue and a slight upward trend in non-tax revenue from 2019 to 2021, as well as that, a weak positive relationship exists between tax revenue and non-tax revenue, indicating that changes in tax revenue do not strongly influence changes in non-tax revenue. Accordingly, the study recommends that the Sokoto State government should explore alternative revenue streams, improve tax collection efficiency, stabilize non-tax revenue, and conduct regular reviews to assess the effectiveness of revenue generation and allocation strategies.